Dish TV - Q4 FY2013 and Consolidated FY2013 results - First Cut - Microsec

Dish TV India Limited (Dish TV) announced its Q4 FY2013 and consolidated FY2013 results on 23 May 2013. While the company's top line lagged our as well as Bloomberg Consensus estimates, its losses came higher than our as well as consensus estimates.

While Dish TV's top line shrunk 0.4% q-o-q to Rs. 555.4 Crores, its losses contracted 2.8% sequentially to Rs. 43.8 Crores in Q4 FY2013. The company reported subdued subscriber additions of 0.2 Mn customers during the quarter whereas it reported Average Revenue Per User (ARPU) of Rs. 157 during the quarter compared with Rs. 160 in Q3 FY2013. The decline in ARPU, which led to fall in revenues, remained key reason for Dish TV's top line remaining below our estimates. The disappointing thing in the results was dip in EBIDTA Margins, which stood at 21.6% in Q4 FY2013 compared with 24.7%, a quarter earlier. However, the management indicated that dip in margin was due to pending content agreement, which was settled during the quarter. Excluding the same, the EBIDTA would have been higher by Rs. 40-50 Crores as the management stated. This factor could have also resulted in losses coming lower than our as well as consensus estimates.

Going forward, Dish TV aims at EBIDTA Margins to remain north of its yearly numbers of 26.7%. As the management stated, the company may focus on improving margins and ARPU in the upcoming quarters. Dish TV's management target an ARPU of Rs. 175 by the end of FY2014. Furthermore, the company plans to repay loans of Rs. 750 Crores in near term, which could result in lower interest outgo and may help it to turn the bottom line in black. In addition, with addition of 5 more HD channels in April, the company continue to offer broadest HD portfolio with 25 HD channels and 17 HD services on its platform. Moreover, Dish TV launched India's first SD recorder 'Dish+' with unlimited recording facility. Equipped with USB slot, it was initially launched in 42 cities under Phase I and II of digitization and is now available across the country. These initiatives coupled with ongoing government's push for digitization across the country are expected to keep driving the company's performance in the upcoming quarter. With this, we continue to rate Dish TV a BUY.

Source : Equity Bulls

Keywords